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TMI Blog2019 (5) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... such demutualisation shall also be included. Hence, the holding period of the asset is to be calculated from the acquisition of date of BSE card and not from the date of conversion of BSE card into equity shares. As per the section 55(2)(ab) of the Act, the cost of acquisition in relation to equity shares allotted to a shareholder under a scheme of demutualisation shall be the cost of acquisition of his original membership of the exchange. So from the express provisions, it is clear that the cost of acquisition of BSE card shall be the cost of acquisition of BSE shares and the shares are deemed to be acquired on the date of acquisition of BSE card and not from the date of their conversion. Hence, the date of holding/acquisitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt u/s. 10(38) of the Income-tax Act, 1961 (hereinafter referred to as the Act ). The AO completed the assessment u/s. 143(3) of the Act and allowed the claim of the assessee. Subsequently, the AO found that the LTCG was earned by assessee from sale of unquoted shares of Bombay Stock Exchange (BSE) and STT too was not deducted on it so, according to AO, the assessee was not eligible for claiming exemption. Hence, the case was reopened u/s. 147 of the Act and notice u/s. 148 and later 143(2) and 142(1) were issued and served upon the assessee. Before the AO, the assessee s contention was that the assessee transferred its 4562 shares out of the 10,000 shares at a total consideration of ₹ 2,37,22,400/- which was in accordance with sec. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Financial Advisory Services Ltd. Vs. ITO dated 29.01.2014 . Aggrieved, revenue is in appeal before us. 4. The Ld. DR assailing the decision of the Ld. CIT(A), wants us to reverse the order of the Ld. CIT(A) and uphold the order of AO and relied upon the order of AO. Per contra, the Ld. AR supported the action of the Ld. CIT(A) and does not want us to interfere with the order of the Ld. CIT(A). 5. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee company, R. M. Shares Trading Pvt. Ltd., is engaged in business of share trading and share broking, and have acquired the membership card (Clg. No. 594) of Bombay Stock Exchange (BSE) from Mr. Ratan Lal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 200 * 4562 shares). The assessee computed the LTCG as under;- 6. We note that issue before us is no longer res-integra. The co-ordinate bench of ITAT Mumbai decision in ITA No. 3118/M/2012 M/s. Parag Parikh Financial Advisory Services Ltd. Vs. ITO dated 29.01.2014, has adjudicated an identical issue, wherein it was held that section 2(42A)(ha) is relevant for deciding the point in issue which is reproduced as under: 2. Definitions In this Act, unless the context otherwise requires,- (42A) 9 [ short-term capital asset means a capital asset held by an assessee for not more than 10[thirty-six] months immediately preceding the date of its transfer10a :] 11[Provided that in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all in the definition of short term capital asset and if the period is more than 36 months then the asset will fall in the definition of long term capital asset. As per the section 2(42A)(ha) supra, for determining the holding period of capital asset being equity shares allotted in pursuance to demutualisation of a recognised stock exchange in hand, the period for which the assessee was a member of the recognised stock exchange prior to such demutualisation shall also be included. Hence, the holding period of the asset is to be calculated from the acquisition of date of BSE card and not from the date of conversion of BSE card into equity shares. As per the section 55(2)(ab) of the Act, the cost of acquisition in relation to equity share ..... X X X X Extracts X X X X X X X X Extracts X X X X
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